The FTSE 100 struggled to gain momentum on Wednesday (17 April) as weakness among utility stocks weighed on performance, leaving the blue-chip index just 1.4 points higher 7,471.32.
There is a slow start to next week thanks to the Easter Monday Bank Holiday but, next Wednesday (24 April), the German Ifo Business Climate survey will offer an insight into the health of Europe’s largest economy (see Economic update). Overnight next Thursday (25 April), the Bank of Japan is set to update on monetary policy, while later in the day durable goods orders data from the US will reveal how many orders have been placed for items like cars, computers, appliances and airplanes. Finally, on Friday (26 April), the initial estimate of US GDP for the first quarter will be announced. The US Federal National Mortgage Association is forecasting a slowdown in growth to 1.3%.
The recruitment sector was in focus this week as two of its constituents updated the market. On Monday (15 April) Robert Walters (RWA) reported group net fee income in the first quarter was up 11% to £98.6m driven by another strong performance in Asia Pacific, where net fees rose by 12%, and helped by a stronger than expected performance in the UK, where net fees grew by 10% compared to just 2% in the final quarter of last year. The firm’s biggest market is Japan where employment levels are so high that the job offer to applicant ratio is 1.6 times. Net fee income here was up 15% in the quarter and it was a similar story across Asia with double-digit growth in mainland China, the Philippines, Indonesia, Thailand and Vietnam. Its larger rival Hays (HAS) produced a more disappointing update on Tuesday (16 April). Group net fee income grew by 5% in the three months to the end of March, adjusted for the timing of Easter, which marked a slowdown from the 9% growth posted in the second quarter. Hays’ key markets are Germany, which makes up 27% of net fees, the UK and Ireland, which make up 23% of net fees, and Australia and New Zealand, which make up 17% of net fees.
The German Ifo Business Climate survey has a good historical track record of predicting future movements in GDP. The release is likely to be closely watched after the German government halved its growth forecast for 2019 to just 0.5%. The German economy is heavily reliant on exports which have been affected by trade tensions, Brexit and a softer global economy.
On 16 April China reported GDP growth of 1.4% for the first quarter of 2019 – towards the top end of forecasts. Funds offering exposure to Chinese stocks include Neptune China and Janus Henderson China Opportunities which have ongoing fees of 0.96% and 0.87% respectively. Both count Chinese technology giants Alibaba and Tencent among their top ten holdings.
24 April – Car testing business AB Dynamics (ABDP) has been one of the biggest small cap success stories on the London market with its shares trading at more than 20 times the 86p issue price from its May 2013 IPO. Investors will be hoping it can deliver further good news with its first half results – a recent trading update was encouraging, pointing to significant year-on-year increases in profit and revenue.
26 April – Advertising giant WPP (WPP) is scheduled to update on first quarter trading just over a year on from the acrimonious departure of its founder Martin Sorrell. After a tricky start his permanent successor Mark Read is looking to put his stamp on the business and the statement may include further details on the planned sale of its Kantar market research business.
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